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Monday, June 15, 2009

Mortgage Sales May Rise

Source : The Sunday Times, June 14, 2009

Home owners become more receptive to mortgagee sales as a way to secure a better price

Property market watchers will likely be keeping an eye on the 'forced-sale' auction on June 23 of two units at Jasmine Court condominium along Upper Thomson Road.

The two units, owned by one person, will be offered as MCST (management corporation strata title) sales at the Knight Frank auction.

The last time Knight Frank offered such a sale was in April last year. A condo's management can initiate an MCST sale if a unit owner is in arrears on monthly maintenance and service payments.

Given the current downturn, there has also been talk that the number of mortgagee sales - when owners are unable to refinance their home loans - may increase.

Mr Shaun Poh, DTZ's senior director for investment advisory services and auction, said, however, that in the short term 'maybe (in the) next three to six months, I will not expect any increase in the number of mortgagee sales'.

He said banks this time round are quite prepared.

'That's why I think there is no panic repossession or foreclosure. The banks are not pulling the plug and are more prepared to talk to borrowers about restructuring their loans,' he explained.

Colliers International's figures show that the number of mortgagee sales across all auction houses has not seen a large jump in the first five months of the year.

The highest number of mortgagee-sale auctions was 21 - in February - while the lowest was 15 - last month.

Ms Grace Ng, Colliers' deputy managing director and auctioneer, said: 'I think the banks prefer to give the owners time to manage the property on their own.'